Bold leadership provides powerful direction to businesses when navigating competitive markets and dynamic environments. But too much of anything can be detrimental, and boldness poorly contained is downright reckless. When bold leaders repeatedly overstep key boundaries, they move ever closer to becoming bad leaders. With this in mind, this article explores the recent trend on Elon Musk leadership.

Given recent events, it appears Musk has taken boldness too far. And as a result of bad leadership, his company and his shareholders are suffering the consequences.

Defining Bold Leadership in Action

It’s no secret that leadership makes or breaks many businesses. In competitive markets, leadership can provide the necessary direction, motivation, and vision to help companies succeed. Bold leaders accomplish this with ease. But what separates bold leaders from bad leaders?

Certainly, bold leaders are visionary, have excellent communication abilities, and powerful interpersonal skills. But their bold nature includes many other valuable assets that set them apart.

The following traits can best be used to define bold leadership:

Constantly seeks and embraces change for competitive advantage

Defines a clear vision, and communicates it effectively to others

Maintains optimism with a strong sense of commitment and perseverance

Invites and utilizes input from a variety of sources for effective decision-making

Effectively delegates tasks and responsibilities for optimal outcomes and efficiency

Seeks top talent while promoting inclusive environments and a team-oriented approach

Grounds strategies in values, principles and a customer-centric perspective

Balances the needs of all stakeholders in developing innovative and creative strategies

Questions About Elon Musk’s Ability to Recruit (And Keep) Top Talent

By all accounts, Musk is a visionary and a genius.

His corporate career highlights many incredible accomplishments, ranging from PayPal to SpaceX. He has repeatedly shown perseverance and commitment in many endeavors. He has also demonstrated an ability to be dynamic and rolls with a changing market. And he is extremely charismatic, outspoken, and forceful in his public communication. Certainly, these attributes would better align with bold leadership than bad leadership.

But there is more to the story. While the previously mentioned characteristics align with bold leadership, Musk lacks many other features of a bold leader today.

Consider his ability to recruit and use top talent. Tesla Inc. remains without a Chief Operations Officer and has for some time. The Chief Accounting Officer recently left after being there for only a month. Rumors abound that Tesla’s Vice President of Global Finance may be exiting as well. Unlike with bold leadership, bad leaders struggle to keep top talent due to poor organizational cultures. Not only does bring into question Musk’s ability to create team environments, but it also raises concerns about his interpersonal skills.

Questions About Elon Musk’s Values and Priorities

Bold leadership establishes strategies based on sound principles and values, while bad leadership may not.

Bad leaders tend to focus too much on their own self-interests rather than those of the company or customer.

In recent weeks, Musk has demonstrated questionable behaviors in both respects. In regards to values, Musk recently appeared on a podcast with Joe Rogan, smoking marijuana and drinking whiskey. Back in July, Musk also called one of the Thai caver rescuers a pedophile without justification. Why? Because the man suggested Musk’s offer to help with a mini-submarine was a PR stunt. These are hardly the values typical of an effective bold leader.

Each of these indiscretions required Musk to apologize, and each has resulted in a drop in Tesla’s stock price. But these behaviors are not the only ones reflective of bad leadership.

During quarterly earnings interviews, Musk has berated analysts for being ignorant and uneducated. Likewise, he has taunted short-sellers on numerous occasions, stating they undermine the value of the company. Unlike bold leadership that fosters respect for others, Musk seems to be doing the opposite. In the process, he is isolating himself while undermining Tesla’s value.

When is Bold Leadership bad leadership?

Questions About Musk’s Ability to Share the Spotlight

Musk’s ability to embrace media is well recognized. His attention-grabbing efforts have coincided with the design of luxurious electric cars, the launching of rockets, and transportation tunneling. When done well, these opportunities in the spotlight can be helpful.

Bold leaders use such platforms for communication, vision, and inspiration. In contrast, bad leaders create distractions and hinder their firms by using the media ineffectively. Musk most recently portrays the latter, as he appears to be progressively more consumed by his own ego.

Is Elon Musk Wearing Too Many Hats?

Not only is Tesla without a Chief Operations Officer, but Musk also serves as both Chairman and CEO. In addition to his struggle retaining top talent, he also has difficulty delegating control to others.

Even if Musk could handle all of these positions at Tesla, he is only involved in the company part-time. SpaceX and other endeavors consume a significant portion of this time. Musk admitted as much during a recent New York Times interview, describing how burdened he is with responsibilities.

This inability to effectively delegate tasks to others and share control reflects key aspects of bad leadership.

Is Tesla’s Board of Directors a Parent, Puppet or Both?

An effective board of directors exists independent of the CEO of the company, has autonomy, and possesses the power to hold executives accountable. When it comes to Tesla, none of this is true.

Musk himself is the largest shareholder and owns a fifth of the outstanding stock of the company. In fact, he recently leveraged his position to threaten a conversion of the company to a private entity. Tesla’s board has little autonomy or power to reel in bad leadership. Though they may seem to serve as parents to an adolescent-acting Musk, they are better described as puppets.

Plenty of evidence exists to support this.

Two proxy advisory firms have recommended that shareholders oust the existing director of the board. This did not happen.

Other recommendations have called for the board to split the roles of CEO and Chairman into two positions. This also has yet to occur.

A big part of the problem is that the board is composed of members with conflicts of interest. In addition to Kimbal Musk, Elon’s brother, four other board members serve as directors at Musk’s other companies. With Musk’s majority share of Tesla stocks and divided interests, Tesla’s board remains unable to control his bad leadership tendencies.

Bold leadership is good… until it becomes too bold.

Being Too Bold Can Have to a Negative Impact

For any company, bad leadership can steer the business in a less than optimal direction. For Tesla, this tendency seems to be exponentially true. This is where Musk’s boldness is uniquely detrimental.

For example, since he threatened to take Tesla private (and didn’t), stock prices have dropped 27 percent. Likewise, Tesla has repeatedly (if not consistently) failed to meet production forecasts. And the company is over $9 billion in debt with revenues paling by comparison.

When bold leadership isn’t backed up with performance, or threats are made without action, confidence falls. This is exactly where Tesla finds itself at the moment.

“Tesla Inc. is under investigation by the Justice Department over public statements made by the company and Chief Executive Officer Elon Musk, according to two people familiar with the matter. The criminal probe is running alongside a previously reported civil inquiry by securities regulators.” – Bloomberg.com

Is It Too Late to Change Course?

Despite Musk’s recent tirades and outbursts, Tesla remains a bold business with tremendous opportunity for success. Musk remains one of the most innovative, charismatic, and visionary leaders in the world. Thus, the bad leadership tendencies of late certainly can be reversed. But some significant changes need to take place.

And Musk himself will have to dial back his boldness a bit in the process.

Here are a few considerations that Musk should pursue to get Tesla back on track.

Relinquish CEO duties to a qualified candidate

Accept an alternative leadership role that aligns with the expertise and time availability

Restructure Tesla’s board of directors without conflicts of interest or dependencies

Expand proxy voting opportunities for shareholders to select board members

The actions of bold leaders like Musk, who is slightly eccentric and extremely intelligent, can be hard to predict.

But even so, being too bold can result in bad leadership. The message here is not one of doom and gloom. However, warning flags are flying, and changes in leadership approaches are needed for Tesla to excel.

Right now, those changes involve Musk. And with Musk in the driver’s seat, he will be the one deciding whether or not to shift gears.

The future of Tesla depends on it.

John R. MilesEVP & Associate Publisher

John R. Miles is Executive Vice President of Business Development and Associate Publisher of Bold Business. He is a sought-after motivational speaker and writer. He brings visionary leadership style and talent as a Navy Veteran and an internationally experienced CEO, COO, and Fortune 50 CIO across a multitude of industries. Miles is also an operating partner at the Virgo Investment Group where he is responsible for identifying and pursuing new investments while supporting existing portfolio companies with operational expertise. He is active on Linkedin and Twitter and published in a variety of media. Miles graduated with honors from the U.S. Naval Academy where he was a varsity athlete.